In 1906 he noticed that patients who had previously received injections of horse serum or smallpox vaccine had quicker, more severe reactions to a second injection. He, along with Béla Schick, coined the word allergy (from the Greek allos meaning "other" and ergon meaning "reaction") to describe this hypersensitivity reaction.

Soon after, the observation with smallpox led Pirquet to realize that tuberculin, which
Robert Koch isolated from the bacteria that cause tuberculosis in 1890, might lead to a similar type of reaction. Charles Mantoux expanded upon Pirquet's ideas and the Mantoux test, in which tuberculin is injected into the skin, became a diagnostic test for tuberculosis in 1907.